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Usio, Inc. (USIO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $21.18M vs Wall Street consensus of $22.19M*, and EPS was -$0.02 vs $0.005*, both misses. Adjusted EBITDA was $0.37M vs $0.78M in Q3 2024; EBITDA was -$0.03M vs consensus $0.92M*, driven by prepaid revenue weakness and lower interest income .
  • Sequentially, revenue increased by over $1.0M vs Q2, underpinned by record processing volumes across ACH, Credit Card, and PINless Debit; total payment dollars processed rose to $2.18B (+8% YoY) and transactions hit 16.2M (+27% YoY) .
  • Management reiterated a stronger second half vs first half and expects a return to top-line growth in Q4 and increasing cash through year-end; SG&A to remain relatively flat sequentially near term .
  • Stock narrative catalysts: shift toward recurring revenue, ACH and PINless momentum (mortgage servicing/fintech), enterprise merchant implemented that could exceed $100M of annual recurring processing volume, and $760K of YTD buybacks with ~$3M authorization remaining .

What Went Well and What Went Wrong

What Went Well

  • Record processing volumes: seven all-time quarterly records (ACH metrics, Credit Card transactions, PINless Debit transactions/dollars); total payment dollars processed $2.18B (+8% YoY); transactions 16.2M (+27% YoY) .
  • ACH strength: revenues +36% YoY for Q3 (third consecutive >30% quarter), driven by net new and organic growth; PINless Debit transactions +96% YoY and dollars +87% YoY, led by mortgage servicing and fintech .
  • Liquidity and buybacks: cash $7.7M; positive operating cash flow; YTD repurchases >$760K. “We believe we have sufficient liquidity to opportunistically capitalize on…M&A” .

What Went Wrong

  • Missed consensus: revenue $21.18M vs $22.19M*, EPS -$0.02 vs $0.005*, EBITDA -$0.03M vs $0.92M*; YoY revenue down 1% as prepaid issuance revenues declined after a reseller’s large downstream account was acquired .
  • Profitability compressed: Adjusted EBITDA fell to $0.37M vs $0.78M in Q3 2024; Adjusted EBITDA margin 1.7% vs 3.6% YoY .
  • SG&A rose to $4.5M from $4.1M YoY on salaries, infrastructure, travel, and professional fees; interest income declined; Output Solutions revenue impacted by fewer one-time projects YoY .

Financial Results

Headline Financials (Quarterly)

MetricQ1 2025Q2 2025Q3 2025
Revenues ($USD Millions)$22.009 $19.961 $21.180
Gross Profit ($USD Millions)$4.809 $5.140 $4.870
Gross Margin %21.9% 25.8% 23.0%
Operating Income (Loss) ($USD Millions)($0.240) ($0.397) ($0.464)
Net Income (Loss) ($USD Millions)($0.235) ($0.367) ($0.415)
Diluted EPS ($USD)($0.01) ($0.01) ($0.02)
Adjusted EBITDA ($USD Millions)$0.666 $0.502 $0.368
Adjusted EBITDA Margin %3.0% 2.5% 1.7%

Q3 Year-over-Year Comparison

MetricQ3 2024Q3 2025
Revenues ($USD Millions)$21.321 $21.180
Gross Profit ($USD Millions)$4.896 $4.870
Gross Margin %23.0% 23.0%
Operating Income (Loss) ($USD Millions)($0.377) ($0.464)
Net Income (Loss) ($USD Millions)$2.851 ($0.415)
Diluted EPS ($USD)$0.10 ($0.02)
Adjusted EBITDA ($USD Millions)$0.777 $0.368
Adjusted EBITDA Margin %3.6% 1.7%

Segment Revenue – Q3 Detail

SegmentQ3 2024 ($)Q3 2025 ($)YoY Change
ACH & Complementary Services$4,302,510 $5,844,267 +36%
Credit Card$7,197,362 $7,351,400 +2%
Prepaid Card Services$4,017,153 $2,796,782 -30%
Output Solutions$5,253,388 $4,844,496 -8%
Interest - ACH & Complementary$201,545 $160,296 -20%
Interest - Prepaid Card Services$309,131 $137,841 -55%
Interest - Output Solutions$40,389 $45,251 +12%
Total Revenue$21,321,478 $21,180,333 -1%

KPIs – Sequential Comparison (Q2 to Q3)

KPIQ2 2025Q3 2025
Total Payment Dollars Processed ($USD Billions)$1.94 $2.18
Total Transactions Processed (Millions)14.1 16.2
Output Solutions – Electronic-only Documents (Millions)20.0 20.0
Output Solutions – Mail Pieces Processed (Millions)5.4 5.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY 20255–12% growth (Q2 commentary) “Return to top-line growth” in Q4; 2H > 1H (qualitative) Maintained qualitative; numeric not reiterated
SG&ANear termSG&A significantly lower in 2H; full-year nominally up vs 2024 SG&A to remain relatively flat sequentially near term; higher vs prior-year periods Updated language; consistent trajectory
Cash PositionFY 2025 2HCash to increase in second half Expects cash position to increase through remainder of FY25 Maintained
Card Issuing TrajectoryFY 2025/2026Volumes to benefit from new implementations in 2H Final quarter of difficult comps; sequential growth begins rebound; pipeline strong Maintained with added detail

Earnings Call Themes & Trends

TopicQ1 2025 (Prior Mentions)Q2 2025 (Prior Mentions)Q3 2025 (Current)Trend
ACH momentumStrong ACH growth: dollars +42% YoY; transactions +36% Dollars +19% YoY; transactions +33% All-time records; revenues +30% YoY; continued strength Strengthening
PINless Debit adoptionNot highlighted8th consecutive growth; TX +144% YoY, $ +93% YoY All-time records; TX +96% YoY, $ +87% YoY Sustained high growth
Credit Card (PayFac)PayFac +25% YoY; >50% of card revenue PayFac double-digit YoY growth; card dollars +9% YoY Transactions record; dollars +12% YoY; enterprise merchant live Improving volumes
Output Solutions mix shiftRevenues +4% Electronic-only 20M pieces; profitability better despite lower price/unit Electronic-only 20M; mail 5.4M; replacing equipment to expand capacity Margin-positive mix shift
Technology initiativesEmphasis on new tech; strong pipeline Implementing wearables and biometric payments Wearables demos; filtered spend program; UCO One onboarding Execution progressing
Government/aid programsNot mentionedNot mentionedPotential benefit from aid programs tied to shutdown; inbound interest from cities/counties Opportunistic tailwind
Recurring revenue narrativeGrowing recurring base More programs in implementation across businesses Most revenue recurring; YoY comps distorted by prior one-time items Increasing recurrence
Cost disciplineSG&A flat YoY SG&A elevated due to one-time items; expected lower in 2H SG&A ~flat sequentially near term; higher YoY Stabilizing sequentially

Management Commentary

  • “We delivered on our commitment to shareholders with a solid quarter…including seven all-time records…on pace to generate second half results exceeding those of the first half.” — Louis Hoch, CEO .
  • “PINless debit…transactions and dollars processed were up 96% and 87%…driven by growth in the mortgage servicing and fintech industries.” .
  • “Revenues were up on a sequential basis in all of our business lines…this is a great start to the second half…leading Usio to growing once again this year.” — Louis Hoch .
  • “One of the largest new enterprise merchants has now been implemented…processing with us over the past few months.” — Greg Carter .
  • “We believe we have sufficient liquidity to opportunistically capitalize on a more active M&A market…accelerate our growth.” — Louis Hoch .

Q&A Highlights

  • Pipeline and implementations: Focus shifting to accelerating implementations of already-sold customers; adoption pace largely outside the company’s control; UCO One standardization helps boarding but integration timing is customer-dependent .
  • Government shutdown impacts: Strong inbound interest from local governments to bridge payments during SNAP suspension; some programs pushed out pending resolution .
  • M&A criteria: Strict approach—must provide synergy (people/industry/tech), be acquired “right,” and not have fix-required issues that distract from organic growth .
  • Buyback authorization: Just over $3M remains on the current repurchase plan .
  • Metrics clarification: Credit Card transaction metric includes PINless Debit; PINless revenue is recorded within ACH/complementary services .

Estimates Context

  • Q3 2025 vs Consensus: Revenue $21.18M vs $22.19M*, EPS -$0.02 vs $0.005*, EBITDA -$0.03M vs $0.92M* .
  • Q4 2025 Outlook (Consensus): Revenue $23.06M*, EPS $0.01*, EBITDA $1.01M*. Management targets a return to top-line growth in Q4 .
  • Target Price: Consensus $5.13*, with 4 estimates*.

Values retrieved from S&P Global.

MetricQ3 2025 ActualQ3 2025 Consensus*Q4 2025 Consensus*# of Estimates*
Revenue ($USD)$21,180,333 $22,189,550*$23,061,950*5*
Primary EPS ($USD)($0.02) $0.005*$0.01*2* (Q3), 3* (Q4)
EBITDA ($USD)($31,325) $919,750*$1,006,440*—
Target Price ($USD)$5.125*$5.125*$5.125*4*

Key Takeaways for Investors

  • Near-term revenue trajectory: Despite Q3 misses, sequential momentum and management’s Q4 growth commentary suggest improving top-line in the fourth quarter; watch ACH/PINless cadence and prepaid stabilization .
  • Mix and margin: ACH and PINless are high-margin drivers; expect margin support as mix tilts to ACH and Output electronic fulfillment even if Output revenue per unit declines .
  • Prepaid pressure is transitory comp issue: YoY declines reflect loss of a reseller’s large downstream account in 2024; comps should normalize and card issuing shows sequential improvement with a robust pipeline .
  • Liquidity and capital allocation: $7.7M cash, positive cash flow, and remaining buyback authorization (~$3M) provide flexibility for opportunistic M&A and continued repurchases .
  • Implementation timing is key swing factor: Revenue conversion depends on customer implementation pace; UCO One should improve boarding efficiency but integration timing remains customer-driven .
  • Estimate resets likely: Following Q3 misses on revenue/EPS/EBITDA, modest downward revisions to near-term estimates may occur; management’s Q4 growth comments could temper negative revisions*.
  • Trading setup: Near-term stock moves likely tied to visibility on Q4 reacceleration, ACH/PINless growth continuity, and any announced wins/launches (enterprise merchant ramp, filtered spend program, government aid programs) .

Additional Data Points and Drivers

  • Sequential revenue up >$1M vs Q2; all divisions improved sequentially .
  • ACH eight consecutive quarters of YoY growth in electronic check transactions and dollars processed .
  • SG&A to remain relatively flat sequentially near term; higher vs prior year .
  • YTD buybacks >$760K; cash expected to increase through FY25 .